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Olena Omelchenko Takes Part in the Round Table “Localization in Machine Building Industry in Ukraine” Hosted by Kyiv International Economic Forum

News date: 16 July 2020

Olena Omelchenko, Partner, Attorney at Law, Head of International Trade Practice at Ilyashev & Partners Law Firm, delivered a speech at the round table “Localization in Machine Building Industry in Ukraine: How to Fight Off Competition”, which took place on 15 July 2020 in Kyiv. The round table was organized by Kyiv International Economic Forum.

Participants of the round table, including Deputy Minister of the Ministry for Development of Economy, Trade and Agriculture – Trade Representative of Ukraine, Taras Kachka, discussed the draft Law of Ukraine No. 3739 On Introduction of Amendments to the Law of Ukraine On Public Procurement for the Creation of Conditions for Sustainable Development and Modernization of National Industry. The document registered in the Parliament stipulates for additional preferences for domestic manufacturers in the fields of railway transport, municipal machinery, special equipment and power engineering industry. Commencing from 01 January 2021, the localization requirement is expected to be established as a temporary measure (throughout the period of 10 years) at the level of 25-40%.

“The EU and 21 other countries, such as China and Australia, as parties to the WTO Agreement on Government Procurement, may appeal Ukraine’s actions within the WTO dispute settlement procedure,Olena Omelchenko pointed out. – In addition, the EU may initiate consultations and establish an arbitration panel to consider the dispute subject to the procedure provided for in the EU-Ukraine Association Agreement. Should Ukraine find itself on a losing side, it will be obliged to bring its legislation in line with international agreements. Moreover, the draft law may provoke political pressure and spark criticism on the part of Ukraine’s trading partners”.

Olena Omelchenko stressed the necessity of developing a strategy for the protection of the domestic manufacturers and noted that the adoption of the draft law may result in a violation by Ukraine of its international obligations under the WTO Agreement on Government Procurement and of the EU-Ukraine Association Agreement.